As the cloud becomes more pervasive—driving everything from social networking to mobile apps—the computers that power it must guzzle more and more energy. Today, startup company SeaMicro, chip maker Intel, and electronics giant Samsung unveiled a new computer design that could make the data centers that power cloud services dramatically more efficient.

The new server design uses half the energy and takes up a third of the space of servers that do the hard work in most data centers today.

Mozilla, the nonprofit browser maker, and CompSec, which builds cloud computing infrastructure for federal intelligence agencies, are already using the new designs.

SeaMicro, based in Santa Clara, California, has received $60 million in venture funding and a $9.3 million U.S. Department of Energy grant intended to encourage greater efficiency for cloud infrastructure.

Until now, the startup was known for making small, efficient servers suitable only for low-powered jobs in a data center. These servers use Intel’s Atom chips, originally developed for mobile computers. The new design keeps many of the same efficient features but swaps in a conventional server chip from Intel’s Xeon line, allowing it to do more computationally taxing tasks like running the vast databases at the heart of social networks or online stores.

“We were able to address an important portion of this rapidly growing market [before], but by no means all of it,” said SeaMicro’s CEO and cofounder, Andrew Feldman, at an event on Tuesday in San Francisco. “This allows us to address the entire data center.”

Many people in the industry are eagerly awaiting the arrival of servers built around smart-phone chips, which are highly energy-efficient, as a way to cut data center costs. Those chips are made by a variety of companies, including Qualcomm, Marvell, and Texas Instruments, using designs licensed from U.K. company ARM, a shift that threatens to dilute Intel’s dominance of the server chip market. Hewlett-Packard announced late last year that it would launch a line of servers with cell-phone chips inside, in partnership with startup Calxeda.

Mini motherboard: SeaMicro has developed custom chips (the four along the base of this motherboard) that take over the work of components scrapped to save space and energy.

Intel’s partnership with SeaMicro could help it fend off that threat. ARM-based chips are promising but not yet available in versions capable of the more powerful 64-bit computing tasks that data centers require, points out Jean Bozman, an analyst with IDC. SeaMicro’s approach, which combines Intel’s proven 64-bit server chip with a stripped-down, more efficient design, could gain a foothold first. “This is already shipping to customers,” she points out.

SeaMicro can deliver energy and space savings without a mobile chip because it found ways to scrap components that make servers inefficient, said Feldman at Tuesday’s event. “We are ripping off gobs of components that suck power like vampires,” he said. “Our patented technology allows us to eliminate all but three components from a [server’s] motherboard: the processor, the RAM, and our own chip.”

Conventional motherboards also feature network cards, BIOS chips (which help a computer start up), fans, USB connectors, LED lights, and other components that constantly use power and sap efficiency, said Feldman. SeaMicro’s chip does the job of the needed components—such as BIOS chips and network links—in a more efficient way. For example, the SeaMicro chip can power down its networking capabilities when they’re not needed. “It’s an exercise of removing the death by a thousand cuts that you normally get,” said Feldman.

As a result, the motherboard inside one of SeaMicro’s new servers is just 11 inches long and five inches wide. A conventional server motherboard is around two feet long by 18 inches wide.